But skeptical federal and state regulators are now taking a hard look at Stanford's operationâespecially those CDs, whose underlying investments seem questionable. Over the past 12 months, the stock market and hedge funds have lost huge amounts of value even as Houston-based Stanford Financial Group continued to pay out above-average returns and claimed to have boosted the assets it oversees by 30%, to more than $50 billion.

BusinessWeek has learned that the Securities & Exchange Commission, the Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority, a major private-sector oversight body, are all investigating Stanford Financial. The probes focus on the high-yield CDs and the investment strategy behind them. According to people close to the investigations, the three agencies are also looking at how Stanford Financial could afford to give employees large bonuses, luxury cars, and expensive vacations. Selling CDs typically is a low-margin business."

The "Sir" bit is just a tad misleading because he is a Texan who resides in the US Virgin Islands but holds dual citizenship, also being a citizen of Antigua and Barbuda. "Knighted" by the Governor-General of Antigua and Barbuda, Sir James B. Carlisle. And there hangs a tale or two.

Washington, D.C., Feb. 17, 2009 â The Securities and Exchange Commission today charged Robert Allen Stanford and three of his companies for orchestrating a fraudulent, multi-billion dollar investment scheme centering on an $8 billion CD program.

Stanford's companies include Antiguan-based Stanford International Bank (SIB), Houston-based broker-dealer and investment adviser Stanford Group Company (SGC), and investment adviser Stanford Capital Management. The SEC also charged SIB chief financial officer James Davis as well as Laura Pendergest-Holt, chief investment officer of Stanford Financial Group (SFG), in the enforcement action.

Pursuant to the SEC's request for emergency relief for the benefit of defrauded investors, U.S. District Judge Reed O'Connor entered a temporary restraining order, froze the defendants' assets, and appointed a receiver to marshal those assets.

"As we allege in our complaint, Stanford and the close circle of family and friends with whom he runs his businesses perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve assets for investors."

Rose Romero, Regional Director of the SEC's Fort Worth Regional Office, added, "We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world."

"Most financial institutions are publicly held and have different priorities than privately held SIB. Their first priority is to provide a return to the bank's shareholders, through either dividend payments or increased share value. Too often long-term performance and future growth are sacrificed for short-term gains in order to meet shareholders' expectations. Their second priority is to compensate the bank's top management. In many instances management compensation is not based on profit, productivity or growth, but on factors that are not correlated to performance.

In contrast, SIB's top management sets goals every quarter linked to profit, productivity and growth. All SIB employees are reviewed every 90 days and rewarded based on their individual and team performances as they directly relate to achieving these goals. By staying focused on reaching these quarterly goals, SIB has seen consistent profitability and growth every year since the Bank was founded. After first paying its clients a premium return on their deposits and then rewarding employees for their performance, the Bank has reinvested every dollar earned back into retained earnings. This has continuously strengthened SIB's capital base for future growth and is a significant difference between SIB and other international banks."

Now, with gambling, there is always a chance that you will lose your money. Sometimes you may lose some of it, sometimes you may gain some. Sometimes though, there is a chance that you will lose the lot.

So, when you are considering investing, ask yourself one question, "Can I afford to lose all of this money?" If you can't, don't bother investing.

If someone offers you a chance to invest with returns above and beyond what you would expect to be a reasonable return, the chances of you losing the lot increase dramatically. Ponzi/pyramid schemes tend to offer a great return on your investment and that is why some people do well but a lot more lose a lot.

"...........he's got a real problem because he knows an awful lot. And I would suspect there are a number of people, very heavyweight people, throughout the offshore world and in other jurisdictions who really don't want to be associated with Mr Stanford and are not going to be pleased if he talks."

"In a report screened on Wednesday night on ABC News in the US, it was claimed that Sir Allen was suspected of laundering money for the notorious Gulf cartel, and that one of his private jets was detained as part of the investigation last year. "